March 12 (Bloomberg) -- U.S. stocks posted the biggest three-day gain since November as General Electric Co. said losing the top credit rating at Standard & Poor’s won’t hurt business and Bank of America Corp. said it’s profitable. Oil jumped 11 percent, and Treasury 30-year bonds rallied.
GE added 13 percent after losing the AAA ranking that it held since 1956, while Bank of America Corp. surged 19 percent. Wal-Mart Stores Inc. rose 3.1 percent after the government said retail sales beat estimates, indicating the biggest part of the economy is stabilizing. General Motors Corp. jumped 17 percent after saying it won’t need U.S. aid this month. Pfizer Inc. gained 9.6 percent following success in a drug trial.
The S&P 500 Index increased 4.1 percent to 750.74, giving it an 11 percent surge since March 9 that’s the steepest over three days since November. The Dow Jones Industrial Average climbed 239.66 points, or 3.5 percent, to 7,170.06. The Russell 2000 Index of small companies advanced 6.5 percent to 390.12.
“Those banks have been beaten down to almost nothing -- same goes for GE -- so any kind of good news would allow for a bounce,” said Bruce Bittles, the Nashville, Tennessee-based chief investment strategist at Robert W. Baird & Co., which manages $15 billion. “The rally is certainly welcomed, and it may very well be that we have made a low for the year.”
U.S. stocks have surged since the S&P 500 dipped to a 12- year low of 676.53 on March 9. Bank of America today joined two of its biggest competitors, JPMorgan and Citigroup Inc., in saying this week that it made money during the first two months of the year, rebounding from the worst year for financial institutions since the Great Depression.
No ‘Significant’ Harm
GE rose 13 percent to $9.57. The shares have surged 36 percent since March 6 in what may prove to be the biggest weekly gain since at least 1980. It “does not anticipate any significant operational or funding impacts” from the credit downgrade, according to a statement. The long-term debt rating was cut one level to AA+ with a “stable” outlook. GE is down 41 percent in 2009.
Bank of America rallied after Chief Executive Officer Kenneth Lewis said the bank isn’t likely to need more aid when the government completes its “stress test.”
Bank of America rose 19 percent to $5.85. JPMorgan advanced 14 percent to $23.20. Citigroup climbed 8.4 percent to $1.67. The S&P 500 Financial Index jumped 10 percent, giving it a four- day surge of 33 percent.
Futures Rebound
Futures on the S&P 500, which had declined 1.3 percent, rebounded after the Commerce Department said at 8:30 a.m. New York time that retail sales decreased 0.1 percent in February, less than the 0.5 percent slump economists forecast. January’s gain was almost double the previous estimate. Excluding automobiles, February sales unexpectedly climbed 0.7 percent.
“It’s good to see anything in the economic front that beat expectations,” said David Heupel, who helps manage $60 billion at Thrivent Financial for Lutherans in Minneapolis. “Any news that is not bad right now is good for the market.”
Crude oil rose more than $4 a barrel, the biggest gain in three weeks, before OPEC meets this weekend to consider a fourth production reduction.
The global oil market is oversupplied and OPEC will cut output if needed, Shokri Ghanem, who chairs Libya’s state-run National Oil Corp., said today. Other ministers have called for the group to halt reductions. Prices dropped 7.4 percent yesterday after a U.S. government report showed a bigger-than- expected inventory gain.
‘Fragile’ Economy
“OPEC is weighing the likelihood that they may have to remove more barrels from the market during the second quarter if they want to support prices,” said Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington. “They want to be careful, given the fragile state of the global economy.”
Crude oil for April delivery rose 11 percent to $47.03 a barrel in New York, the biggest gain since Feb. 19. Prices are up 5.4 percent in 2009.
Treasury 30-year bonds rose after an auction of $11 billion of the securities drew stronger demand than forecast and the most bids in three years from an investor group that includes foreign central banks. Shorter-term U.S. securities were little changed.
“The auction had pretty big demand,” aid Andrew Richman, who oversees $10 billion in fixed-income assets as a strategist in West Palm Beach, Florida, for SunTrust Bank’s personal-asset management division. “The auction shows that even though there is a lot of supply coming, U.S. Treasuries are seen globally as the safest place to be right now.”
Corn, Soybeans
The benchmark 30-year bond yield fell 0.04 percentage point to 3.63 percent at 3:03 p.m. in New York, according to BGCantor Market Data. The 10-year note yield slipped to 2.89 percent from 2.91 percent.
Corn rose to a six-week high and soybeans gained the most in five weeks after a government report showed improved overseas demand for crops from the U.S., the world’s largest grower and exporter.
Export sales of U.S. soybeans quadrupled to 837,000 metric tons in the week ended March 5 from 155,800 tons a week earlier, the lowest since September, the Department of Agriculture said in a report. Corn sales rose 38 percent to 1.092 million tons, including 616,600 tons sold to Japan, the biggest buyer of the grain from the U.S.
“We had good export sales, and that is a positive development,” said Shawn McCambridge, a senior grain analyst for Prudential Financial in Chicago. “There are signs of economic stability, and that helps to reduce fears about further price erosion. We are beginning to rebuild a base of demand.”
Corn futures for May delivery rose 5.7 percent to $3.8525 a bushel in Chicago, the biggest gain since Jan. 16. The price earlier rose to $3.8675, the highest since Jan. 27. Before today, the most-active contract had fallen 54 percent since reaching a record $7.9925 in June.
Soybean futures for May delivery rose 2.3 percent to $8.82 a bushel in Chicago, the biggest gain since Feb. 5. Before today, the most-active contract had fallen 47 percent from an all-time high at $16.3675 on July 3.
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